MODULE 2

AZNAR VS. GARCIA

FACTS: 

Edward Christensen was born in New York, but he migrated to California where he resided for a
period of 9 years. In 1913, he came to the Philippines where he became a domiciliary until his
death.

During the entire period of his residence in this country he had always considered himself a
citizen of California.

In his will, he instituted an acknowledged natural daughter, Maria Lucy Christensen (legitimate),
as his only heir, but left a legacy sum of money in favor of Helen Christensen Garcia
(illegitimate). Adolfo Aznar was the executor of the estate.

Counsel for Helen Garcia claims that under Article 16, paragraph 2 of the Civil Code, California
law should be applied. Under California law, the matter is referred back to the law of the
domicile ultimately making Philippine law applicable. Therefore, the share of Helen must be
increased in view of the successional rights of illegitimate children under Philippine law.

On the other hand, counsel for Maria Christensen contends that inasmuch as it is clear that
under Article 16 of our Civil Code, the national law of the deceased must apply, our courts must
immediately apply the internal law of California on the matter.

Under California law, there are no compulsory heirs and consequently a testator could dispose of
any property possessed by him in absolute dominion and that finally,  illegitimate children not
being entitled to anything and his will remain undisturbed.

ISSUE: What law on succession should apply, the Philippine law or the California Law?

RULING:

The law that governs the validity of his testamentary dispositions is defined in Article 16 of the
Civil Code of the Philippines, which is as follows: Art. 16. Real property as personal property is
subject to the law of the country where it is situated.

The application of this article in the case at bar requires the determination of the meaning of the
term "national law" is used therein. The "national law" indicated in Article 16 of the Civil Code
above quoted refers to no other than the private law of the State of California.

Appellant, on the other hand, insists that Art. 946 should be applicable, and in accordance
therewith and following the doctrine of the renvoi, the question of the validity of the
testamentary provision in question should be referred back to the law of the
descendant’s domicile, which is the Philippines.

The recognition of the renvoi theory implies that the rules of the conflict of laws are to be
understood as incorporating not only the ordinary or internal law of the foreign state or country,
but its rules of the conflict of laws as well. According to this theory 'the law of a country' means
the whole of its law.

The court in deciding to grant more successional rights to Helen said in effect that there are two
rules in California on the matter: the internal law which should apply to Californians domiciled in
California; and the conflict rule which should apply to Californians domiciled outside of California.

The California conflict rule says: “If there is no law to the contrary in the place where personal
property is situated, it is deemed to follow the person of its owner and is governed by the law of
his domicile.”

Since the domicile of the deceased Edward, a citizen of California, is the Philippines, the validity
of the provisions of his will depriving his acknowledged natural child, the appellant HELEN,
should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of
California, not by the internal law of California .
SAUDI ARABIAN AIRLINES VS. CA

FACTS: 

Morada was a flight attendant of SAUDIA (the airline). During lay-over in Jakarta, she went to a
disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al Ghazzawi, both Saudian
nationals.
Later in the hotel, Thamer attempted to rape plaintiff Fortunately, a roomboy and several
security personnel heard her cries for help and rescued her.

Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an
accomplice. Plaintiff returned to Jeddah a few days later and was asked by SAUDIA officials
about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the
release of Thamer and Allah.

In Jakarta, SAUDIA officials negotiated with the police for the immediate release of the detained
crew members but did not succeed because the plaintiff refused to cooperate. She was afraid
that she might be tricked into something she did not want because of her inability to understand
the local dialect. She also declined to sign a blank paper and a document written in the local
dialect.

Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian
authorities agreed to deport Thamer and Allah after two weeks of detention and were again put
in service by defendant SAUDIA.

Later, she was brought back to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA,
brought her to a Saudi court where she was asked to sign a document written in Arabic. They
told her that this was necessary to close the case against Thamer and Allah. As it turned out, the
plaintiff signed a notice to her to appear before the court on June 27, 1993.  Plaintiff then
returned to Manila.

After another court visit, on July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the
same court where the judge, to her astonishment and shock, rendered a decision, translated to
her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she
realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in
Jakarta.

The court found the plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to
music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of
Islamic tradition.

Facing conviction, the private respondent sought the help of her employer, petitioner SAUDIA.
Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah
to help her while her case is on appeal.

Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer
and Allah continued to serve in the international flights.

Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and
allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from
the service by SAUDIA, without her being informed of the cause.  On November 23, 1993,
Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its
country manager.

ISSUE : Whether or not the RTC of Quezon City has jurisdiction to hear and decide the case.

RULING:

YES. On the presence of a “Foreign Element” in the case: A factual situation that cuts across
territorial lines and is affected by the diverse laws of two or more states is said to contain a
“foreign element”. The presence of a foreign element is inevitable since social and economic
affairs of individuals and associations are rarely confined to the geographic limits of their birth or
conception. The forms in which this foreign element may appear are many. The foreign element
may simply consist in the fact that one of the parties to a contract is an alien or has a foreign
domicile, or that a contract between nationals of one State involves properties situated in
another State. In other cases, the foreign element may assume a complex form.

In the instant case, the foreign element consisted in the fact that private respondent Morada is a
resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also,
by virtue of the employment of Morada with the petitioner Saudia as a flight stewardess, events
did transpire during her many occasions of travel across national borders, particularly from
Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a “conflicts'' situation to
arise.

In applying “State of the most significant relationship” rule, to determine the State which has
the most significant relationship, the following contacts are to be taken into account and
evaluated according to their relative importance with respect to the particular issue: (a) the
place where the injury occurred; (b) the place where the conduct causing the injury occurred;
(c) the domicile, residence, nationality, place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any, between the parties is centered.

As already discussed, there is a basis for the claim that overall injury occurred and lodged in the
Philippines. There is likewise no question that the private respondent is a resident Filipina
national, working with petitioner, a resident foreign corporation engaged here in the business of
international air carriage. Thus, the “relationship” between the parties was centered here,
although it should be stressed that this suit is not based on mere labor law violations. From the
record, the claim that the Philippines has the most significant contact with the matter in this
dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in
our view, has been properly established.
 

 
BANK OF AMERICA VS REALITY CORP

FACTS:

Petitioner Bank of America granted loans to 3 corporate borrowers (foreign affiliates of private
respondents).

Due to default in payment of the loans, Bank of America and the 3 corporate borrowers entered
into restructuring agreements. As additional security for the restructured loans, private
respondent American Realty Corporation (domestic corporation), as third party mortgagor,
executed 2 REMs.

The 3 corporate borrowers defaulted in the payment of the restructured loans. Bank of America
filed civil actions before the foreign courts for the collection of the principal loan. 2 cases were
filed before the High Court of Justice in England and 2 cases were filed before the Supreme
Court of Hong Kong High Court. In these civil suits, the private respondent was not impleaded as
party-defendant.

Despite the pendency of civil suits before the foreign courts for the collection of the principal
loan, petitioner Bank of America filed before the Office of the Provincial Sheriff of Bulacan,
Philippines an application for extrajudicial foreclosure of REM. Eventually, the mortgaged
properties were sold at public auction in an extrajudicial foreclosure sale to a third party.

Respondent filed before RTC - Pasig an action for damages against the petitioner. The RTC
rendered a decision in favor of the respondent. On appeal, the CA affirmed the RTC’s decision.

ISSUE: Whether or not the filing of a collection suit before foreign courts constituted a waiver of
the remedy of foreclosure.

RULING:

YES, the act of filing a collection suit against the principal debtors for the recovery of the loan
before foreign courts CONSTITUTED A WAIVER of the remedy of foreclosure.

Philippine laws prohibit the creditor to avail two remedies: collection of loan and
foreclosure of mortgage. It may opt to exercise only one of two remedies so as not to violate
the rule against splitting a cause of action. On the basis of Philippine laws, the filing for collection
abroad amounts to waiver of petitioner to institute foreclosure proceedings.

On the question of the choice of law, Philippine law shall apply notwithstanding the evidence
presented by petitioner to prove the English law on the matter.

A foreign law must be properly pleaded and proved as a fact. Thus, if the foreign law
involved is not properly pleaded and proved, our courts will presume that the foreign
law is the same as our local or domestic or internal law. This is the doctrine of
processual presumption.
Assuming arguendo that the English Law on the matter were properly pleaded and proved, said
foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public
policy of the forum, the said foreign law, judgment or order shall not be applied. The public
policy sought to be protected in the instant case is the principle embedded in our jurisdiction
proscribing the splitting up of a single cause of action.

Moreover, foreign law should not be applied when its application would work undeniable injustice
to the citizens or residents of the forum. Clearly, English Law is not applicable, and the doctrine
of processual presumption cannot be applied.

WILD VALLEY SHIPPING CO. LTD VS CA

FACTS:

Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines,
Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore. Upon the
completion of the loading and when the vessel was ready to leave port, Mr. Ezzar del Valle
Solarzano Vasquez, an official pilot of Venezuela, was designated by the harbour authorities in
Puerto Ordaz to navigate the Philippine Roxas through the Orinoco River. He was asked to pilot
the said vessel on February 11, 1988 boarding it that night at 11:00 p.m. 

The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge together
with the pilot (Vasquez), the vessel’s third mate (then the officer on watch), and a helmsman
when the vessel left the port at 1:40 a.m. on February 12, 1988. Captain Colon left the bridge
when the vessel was under way. 

The Philippine Roxas experienced some vibrations when it entered the San Roque Channel at
mile 172. The vessel proceeded on its way, with the pilot assuring the watch officer that the
vibration was a result of the shallowness of the channel. Between mile 158 and 157, the vessel
again experienced some vibrations. These occurred at 4:12 a.m. It was then that the watch
officer called the master to the bridge. 

At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River, thus obstructing the
ingress and egress of vessels. As a result of the blockage, the Malandrinon, a vessel owned by
herein petitioner Wildvalley Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on
that day.

Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of
Manila, Branch III against Philippine President Lines, Inc. and Pioneer Insurance Company (the
underwriter/insurer of Philippine Roxas) for damages in the form of unearned profits, and
interest thereon amounting to US $400,000.00 plus attorney’s fees, costs, and expenses of
litigation.

RTC rendered in favor of petitioner. CA reversed the decision.

ISSUE: Whether or not the Venezuelan law should apply.

RULING:

NO. It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts
are not authorized to take judicial notice of them. Like any other facts, they must be alleged and
proved.

Nevertheless, we take note that these written laws were not proven in the manner provided by
Section 24 of Rule 132 of the Rules of Court.

The Reglamento General de la Ley de Pilotaje was published in the Gaceta Oficial of the Republic
of Venezuela. A photocopy of the Gaceta Oficial was presented in evidence as an official
publication of the Republic of Venezuela.

The Reglamento Para la Zona de Pilotaje No 1 del Orinoco is published in a book issued by the
Ministerio de Comunicaciones of Venezuela. Only a photocopy of the said rules was likewise
presented as evidence.

Both of these documents are considered in Philippine jurisprudence to be public documents for
they are the written official acts, or records of the official acts of the sovereign authority, official
bodies and tribunals, and public officers of Venezuela.
For a copy of a foreign public document to be admissible, the following requisites are
mandatory:

(1) It must be attested by the officer having legal custody of the records or by his deputy;
(2) It must be accompanied by a certificate by a secretary of the embassy or legation,
consul general, consul, vice consular or consular agent or foreign service officer, and with the
seal of his office.

The latter requirement is not a mere technicality but is intended to justify the giving of
full faith and credit to the genuineness of a document in a foreign country.

It is not enough that the Gaceta Oficial, or a book published by the Ministerio de
Comunicaciones of Venezuela, was presented as evidence with Captain Monzon attesting it. It is
also required by Section 24 of Rule 132 of the Rules of Court that a certificate that Captain
Monzon, who attested the documents, is the officer who had legal custody of those records made
by a secretary of the embassy or legation, consul general, consul, vice consul or consular agent
or by any officer in the foreign service of the Philippines stationed in Venezuela, and
authenticated by the seal of his office accompanying the copy of the public document. 

No such certificate could be found in the records of the case. With respect to proof
of written laws, parol proof is objectionable, for the written law itself is the best evidence.
According to the weight of authority, when a foreign statute is involved, the best
evidence rule requires that it be proved by a duly authenticated copy of the statute

VICTORIA REGNER VS CYNTHIA LOGARTA

FACTS:

Cynthia Logarta and Teresa Tormis were the daughters of Luis Regner   in   his   first   marriage
with   Anicita   Regner.   Victoria Regner is the second wife of Luis. In 1999, Victoria alleged that
Cynthia and Teresa with the help of another sibling defrauded Luis, who was then very ill and
was unable to write, into placing his thumb mark into a Deed of Donation. In said Deed, Luis
purportedly donated a Proprietary Ownership Certificate pertaining to membership shares in the
Cebu Country Club. Victoria alleged that said Deed is void because the placing of thumbmark by
Luis was done without the latter’s free will and voluntariness considering his physical state; that
it was done without Luis’s lawyer; that the ratification made by Luis before he died is likewise
void because of similar circumstances. In the same year, Victoria filed a complaint to annul said
deed with   the   RTC   of   Cebu.

The   sheriff   could   not   deliver   the summonses against Cynthia and Teresa because
apparently, although they are Filipinos, they are not residing here; they are residing in
California. It was only in the year 2000 that one of the summonses was served to one of the
sisters, Teresa, when she came back to the Philippines. Teresa immediately filed a motion to
dismiss on the ground that Victoria   failed   to   prosecute   her   case   for   an   unreasonable
length of time. Naturally, Victoria opposed the MTD. Teresa, in her   rejoinder,   alleged   that  
the   case   should   be   dismissed because   Cynthia,   who   is   an   indispensable   party,  
was   not issued any summons, hence, since an indispensable party is not   served   with  
summons,   without   her   who   has   such   an interest in the controversy or subject matter
there can be no proper determination of the case. The trial court ruled in favor of Teresa; this
was affirmed by the Court of Appeals.

ISSUE: Whether or not the dismissal of Victoria’s complaint is correct.

RULING:

Yes.   The   Supreme   Court   agreed   with   the   arguments presented by Teresa. The
Supreme Court also emphasized: There are generally two types of actions: actions in rem and
actions   in   personam.   An   action   in   personam   is   an   action against a person on the
basis of his personal liability, while an action in rem is an action against the thing itself, instead
of against the person. The certificate, subject of the donation, is a personal property. The action
filed by Victoria is therefore a personal action. So in order for the court to acquire jurisdiction
over the respondents, summons must be served upon them. Further, the certificate is indivisible,
Cynthia’s and Teresa’s interests thereto can only be determined if both are summoned in court.

In personal actions, if the respondents are residents of the Philippines, they  may  be served 
summons in  the following order:
1. Personal Service;
2. If (1) is not possible, Substituted Service;
3. If respondent can’t be found because he is abroad but still a resident of the Philippines, by
publication with leave  of court.

In personal actions still, if the respondents are non-residents, they may be served summons in
the following manner:

1. Personal service through the Philippine embassy;

2.By publication in a newspaper of general circulation in such places and for such time as the
court may order, in  which case a copy of the summons and order of the court  should be sent
by registered mail to the last known  address of the defendant; or
3. in any other manner which the court may deem  sufficient. The above must be with leave of
court.

In the case at bar, Cynthia was never served any summons in any of the manners authorized by
the Rules of Court. The summons   served   to   Teresa   cannot   bind   Cynthia.   It   is
incumbent upon Victoria to compel the court to authorize the extraterritorial service of summons
against Cynthia. Her failure to  do   so  for  a  long  period  of  time  constitutes  a  failure  to
prosecute on her part.

DEL SOCORRO VS. VAN WILSEM

FACTS:

Petitioner gave birth to their son who was a minor upon filing of the case against respondent.
Eventually, their marriage bond ended on July 19, 1995 by virtue of a Divorce Decree issued by
the appropriate Court of Holland. Petitioner together with her son returned to Cebu City.
According to the petitioner, respondent made a promise to provide support to their son in the
amount of 17,500 pesos monthly. However, respondent failed to keep his promise.  Upon finding
out that respondent got married in Cebu City, petitioner filed a case against respondent under
the provisions of RA 9262 (VAWC) for the latter’s unjust refusal to provide support in favor of
their son. Petitioner contends that under Article 195 of the Family Code, respondent is obliged to
support his son. The trial court then dismissed the case on the ground that the information filed
against did not constitute an offense on the ground that he is an alien. Thus the present petition.

ISSUE: WON an alien is obliged to support his minor child under Philippine Law?

RULING:

Yes. Respondent is obliged to support his minor child under Philippine Law. Petitioner however is
mistaken in relying Article 195 of the Family Code in demanding support from respondent since
Article 15 of the Civil Code stresses the principle of Nationality. The obligation to provide support
is a part of Family rights and duties. As such, with respect to the provisions of the Family Code,
it only applies to Filipino Citizens. With respect to the respondent, the law that applies to him
would be the laws of his country with respect to family rights and duties. This does not conclude
however that respondent is not obliged to support his son. In international law, the party who
wants to have a foreign law applied to a dispute or case has the burden of proving the foreign
law. As such, respondent has the burden in proving that the laws of his country do not oblige
him to support his son. In this case, respondent only pleaded the laws of his country (Holland)
but failed to prove the same. Further, the courts do not take judicial notices of the laws of a
foreign country. The alien alleging the same has the burden of proving it. Since respondent
failed to prove the laws of his country which do not oblige him to provide support, the doctrine
of processual presumption shall be applied. Under this doctrine, if the foreign law involved
is not properly pleaded and proved, our courts will presume that the foreign law is the
same as our local or domestic or internal law. As such, it is now presumed that the laws of
the foreign country are the same as that of our laws and therefore respondent is obliged to
provide support to his minor son. Further, even if respondent successfully pleaded and proved
foreign laws which do not oblige him to provide support to his son, such should not be applied.
According to our laws, when the foreign law, judgment or contract is contrary to a sound and
established public policy of the forum, the said foreign law, judgment, or order shall not be
applied. Moreover, foreign law should not be applied when its application would work undeniable
injustice to the citizens or residents of the forum. To give justice is the most important function
of law; hence, a law, or judgment or contract that is obviously unjust negates the
fundamental principles of Conflict of Laws. 
CONTINENTAL MICRONESIA VS. JOSEPH BASSO

FACTS:

Petitioner Continental Micronesia, Inc. (CMI) is a foreign corporation organized and existing
under the laws of and domiciled in the United States of America (US). It is licensed to do
business in the Philippines. Basso, a US citizen, resided in the Philippines prior to his death.

Basso was offered the position of General Manager of the Philippine Branch of Continental. Basso
accepted the offer.

CMI took over the Philippine operations of Continental, with Basso retaining his position as
General Manager. Basso received a letter from Mr. Schulz, who was then CMI's Vice President of
Marketing and Sales, informing Basso that he has agreed to work in CMI as a consultant on an
"as needed basis.” He was told that pursuant to the employment contract dated February 1,
1991, Basso could be terminated at will upon a thirty-day notice.

He was then informed of the company's decision to relieve him as General Manager. CMI offered
Basso a severance pay, in consideration of the Php1,140,000.00 housing advance that CMI
promised him.

Basso filed a complaint for Illegal Dismissal. CMI filed a motion to dismiss alleging the existence
of foreign elements; lack of jurisdiction over the person of CMI and the subject matter.

The Labor Arbiter granted the motion, applying the doctrine of lex loci contractus and that the
terms of the contract did not intend to apply the Labor Code. On appeal, the NLRC remanded
back the case to settle the issue on jurisdiction.

ISSUE: Whether or not the Labor tribunals have Jurisdiction over the case.

RULING:

The Court ruled that the labor tribunals had jurisdiction over the parties and the subject matter
of the case. On the other hand, jurisdiction over the person of CMI was acquired through the
coercive process of service of summons. CMI never denied that it was served with summons.
CMI has, in fact, voluntarily appeared and participated in the proceedings before the courts.

Though a foreign corporation, CMI is licensed to do business in the Philippines and has a local
business address here. The purpose of the law in requiring that foreign corporations doing
business in the country be licensed to do so, is to subject the foreign corporations to the
jurisdiction of our courts.

Where the facts establish the existence of foreign elements, the case presents a COL
issue. Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-
laws case may assume jurisdiction if it chooses to do so, provided, that the following
requisites are met: (1) that the Philippine Court is one to which the parties may
conveniently resort to; (2) that the Philippine Court is in a position to make an
intelligent decision as to the law and the facts; and (3) that the Philippine Court has or
is likely to have power to enforce its decision. All these requisites are present here. 

CMI has a Philippine branch, while Basso was residing here. Our labor tribunals can also make
intelligent decisions as to the law and facts. The incidents of the case happened in the
Philippines. The alleged loss of trust and confidence happened here, and Basso’s dismissal also
took place here.

Clearly, the Philippines is the state with the most significant relationship. It is also noted that a
foreign law, judgment, or contract contrary to a sound and established public policy of the forum
shall not be applied.

Termination-at-will (which is valid in the US) is anathema to the public policies on labor
protection espoused by our laws and Constitution, which dictates that no worker shall be
dismissed except for just and authorized causes provided by law and after observing due
process. Hence, it should not be applied.

Finally, our courts cannot take judicial notice of any foreign law. Here, the US law may have
been properly pleaded but it was not proved in the labor tribunals. Thus, the processual
presumption applies, which gives operation to our own laws here in the Philippines.
CHIQUITA BRANDS, INC. VS. OMELIO

FACTS:

On August 31, 1993, thousands of banana plantation workers from over 14 countries instituted
class suits for damages in the United States against 11 foreign corporations. The banana
plantation workers claimed to have been exposed to dibromochloropropane (DBCP) in the 1970s
up to the 1990s while working in plantations that utilized it. As a result, these workers suffered
serious and permanent injuries to their reproductive systems.

The United States courts dismissed the actions on the ground of forum non conveniens and
directed the claimants to file actions in their respective home countries.

The parties executed a document denominated as the "Compromise Settlement, Indemnity, and
Hold Harmless Agreement" (Compromise Agreement).

The Compromise Agreement provided, among others, that the settlement amount should be
deposited in an escrow account, which should be administered by a mediator. After the
claimants execute individual releases, the mediator shall give the checks representing the
settlement amounts to the claimants' counsel, who shall then distribute the checks to each
claimant.

After dismissal of the civil claim the claimants moved for the execution of the compromise
agreement. The petitioner opposed the execution on the ground of mootness; they argued that
they had already complied with their obligation by depositing the settlement amount into an
escrow account. However, RTC of Panabo granted the motion for execution because there was
no proof that they have fulfilled their obligation.

Petitioner filed a motion to suspend the execution and be allowed to present evidence on their
behalf. During the hearing of the case, the claimants picketed outside the court room and
accused the RTC judge of Panabo as a corrupt official who delayed the execution. Petitioner
requested for change of venue for security purposes and was granted. The case was transferred
and now under the jurisdiction of the RTC of Davao city. On July 2009, the RTC of Davao city
through Judge Omelio ordered the execution of the compromised agreement. Aggrieved by the
RTC’s decision, the petitioner filed for a petition for certiorari even without a prior appeal to the
CA.

ISSUE: whether or not the respondent court committed "grave abuse of discretion amounting to
lack or excess of its jurisdiction in issuing the assailed orders and writs"?

RULING:

Yes. Given the circumstances of this case, petitioners cannot be faulted for failing to make a
formal offer of evidence because they were denied the opportunity to do so. Respondent court
should have given petitioners the chance to offer the deposition of Mr. Stubbs in evidence before
acting on the pending incidents of the case. Thus, respondent court gravely abused its discretion
in issuing the Order dated July 10, 2009, which affirmed execution against
petitioners.Respondent court also erred in issuing the Order dated July 10, 2009. Petitioners'
subsidiaries and affiliates cannot be adjudged solidarily liable.

Under the Compromise Agreement, the law that shall govern its interpretation is the law of
Texas, United States. In this jurisdiction, courts are not authorized to "take judicial notice of
foreign laws." The laws of a foreign country must "be properly pleaded and proved" as
facts.Otherwise, under the doctrine of processual presumption, foreign law shall be presumed to
be the same as domestic law. Unfortunately, there is no evidence that Texan law has been
proven as a fact. Hence, this Court is constrained to apply Philippine law.

In this case, petitioners cannot rely on the five (5) quitclaims for the trial court to quash or recall
the writ of execution. The quitclaims are insufficient to establish that petitioners complied with
their obligation under the Compromise Agreement. They only prove that five (5) claimants
received their respective share in the settlement amount but do not establish that petitioners
deposited the entire settlement amount in escrow. At the very least, petitioners should have
attached proof of actual deposit in their Opposition to the Motion for Execution.

Neither can petitioners rely on the evidence presented during the proceedings conducted at the
Philippine Consulate in San Francisco, California, United States. This Court takes judicial notice
of the administrative case filed against Judge Grageda for his act of receiving evidence abroad
without proper authority.
 MODULE 3

GARCIA V. RECIO

FACTS:
  
Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian citizen, in Malabon,
Rizal, on March 1, 1987. They lived together as husband and wife in Australia. 2 years after their
marriage a decree of divorce, purportedly dissolving the marriage, was issued by an Australian
family court.

Rederick became an Australian citizen and married again to a Filipina (Grace Garcia) in
Cabanatuan City.

October 22, 1995 the couple live separately without prior judicial dissolution of their marriage.
Their conjugal assets were divided according with their Statutory Declarations secured in
Australia.

March 3,1998, Garcia filed a complaint for declaration of Nulity of Marriage on the ground of
bigamy. The trial court declared the marriage dissolved on the ground that the divorce issued in
Australia was valid and recognized in the Philippines. 
  
ISSUE: Whether or not the  respondent was proven to be legally capacitated to marry the
petitioner.

RULING:

Respondent's contention is untenable. In its strict legal sense, divorce means the legal
dissolution of a lawful union for a cause arising after marriage. But divorces are of different
types. The two basic ones are (1) absolute divorce or a vinculo matrimonii and (2) limited
divorce or a mensa et thoro. The first kind terminates the marriage, while the second suspends
it and leaves the bond in full force.There is no showing in the case at bar which type of divorce
was procured by respondent. 

To repeat, the legal capacity to contract marriage is determined by the national law of the party
concerned. The certificate mentioned in Article 21 of the Family Code would have been sufficient
to establish the legal capacity of respondent, had he duly presented it in court. A duly
authenticated and admitted certificate is prima facie evidence of legal capacity to
marry on the part of the alien applicant for a marriage license.

Based on the above records, we cannot conclude that respondent, who was then a naturalized
Australian citizen, was legally capacitated to marry petitioner on January 12, 1994. We agree
with petitioner's contention that the court a quo erred in finding that the divorce decree ipso
facto clothed respondent with the legal capacity to remarry without requiring him to adduce
sufficient evidence to show the Australian personal law governing his status; or at the very least,
to prove his legal capacity to contract the second marriage.

The case was remanded back to RTC for the purpose of receiving evidence which conclusively
show respondent's legal capacity to marry petitioner; and failing in that, of declaring the parties'
marriage void on the ground of bigamy, as above discussed.

SAN LUIS V. SAN LUIS

FACTS:

The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who
was the former governor of the Province of Laguna. 

During his lifetime, Felicisimo contracted three marriages. His First marriage was with Virginia
Sulit on March 17, 1942 out of which were born six children, namely: Rodolfo, Mila, Edgar,
Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo. 

Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son,
Tobias. However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for
Divorce before the Family Court of the First Circuit, State of Hawaii, United States of America
(U.S.A.), which issued a Decree Granting Absolute Divorce and Awarding Child Custody on
December 14, 1973.
On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos,
before Rev. Fr. William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los
Angeles, California, U.S.A. He had no children with the respondent but lived with her for 18
years from the time of their marriage up to his death on December 18, 1992.

Thereafter, respondent sought the dissolution of their conjugal partnership assets and the
settlement of Felicisimo's estate. On December 17, 1993, she filed a petition for letters of
administration before the Regional Trial Court of Makati City.

Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the
decedent was residing at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila;
that the decedent's surviving heirs are respondent as legal spouse, his six children by his first
marriage, and son by his second marriage; that the decedent left real properties, both conjugal
and exclusive.

On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first
marriage, filed a motion to dismiss on the grounds of improper venue and failure to state a
cause of action. Rodolfo claimed that the petition for letters of administration should have been
filed in the Province of Laguna because this was Felicisimo's place of residence prior to his
death. 

He further claimed that respondent has no legal personality to file the petition because she was
only a mistress of Felicisimo since the latter, at the time of his death, was still legally married to
Merry Lee.

The RTC dismissed the petition for letters of administration. The Court of Appeals reversed and
set aside the orders of the trial court in its assailed Decision.

ISSUE/S:

1. Whether or not the venue was properly laid.

2. Whether or not the respondent has legal capacity to file the subject petition for letters of
administration.

RULING:

1. Under Section 1,  Rule 73 of the Rules of Court, the petition for letters of administration of the
estate of Felicisimo should be Aled in the Regional Trial Court of the province "in which he
resides at the time of his death." 

In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz,
Laguna, respondent proved that he also maintained a residence in Alabang, Muntinlupa from
1982 up to the time of his death. Respondent submitted in evidence the Deed of Absolute Sale  
dated January 5, 1983 showing that the deceased purchased the aforesaid property. 

From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for
purposes of fixing  the venue of the settlement of his estate. Consequently, the subject
petition for letters of administration was validly filed in the Regional Trial Court which has
territorial jurisdiction over Alabang, Muntinlupa. The subject petition was filed on December 17,
1993. At that time, Muntinlupa was still a municipality and the branches of the Regional Trial
Court of the National Capital Judicial Region which had territorial jurisdiction over Muntinlupa
were then seated in Makati City as per Supreme Court Administrative Order No. 3. Thus, the
subject petition was validly filed before the Regional Trial Court of Makati City.

2. Anent the issue of respondent Felicidad's legal personality to filed the petition for letters of
administration, we must first resolve the issue of whether a Filipino who is divorced by his alien
spouse abroad may validly remarry under the Civil Code, considering that Felicidad's marriage to
Felicisimo was solemnized on June 20, 1974, or before the Family Code took effect on August 3,
1988. In resolving this issue, we need not retroactively apply the provisions of the Family Code,
particularly Art. 26, par. (2) considering that there is sufficient jurisprudential basis allowing us
to rule in the affirmative.

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry
Lee which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal
personality to file the present petition as Felicisimo's surviving spouse. 

However, the records show that there is insufficient evidence to prove the validity of the
divorce obtained by Merry Lee as well as the marriage of respondent and Felicisimo under the
laws of the U.S.A. In Garcia v. Recio,the Court laid down the specific guidelines for pleading and
proving foreign law and divorce judgments. It held that presentation solely of the divorce
decree is insufficient and that proof of its authenticity and due execution must be
presented. 

Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or
official record of a foreign country by either (1) an official publication or (2) a copy thereof
attested by the officer having legal custody of the document. If the record is not kept in the
Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic
or consular officer in the Philippine foreign service stationed in the foreign country in which the
record is kept and (b) authenticated by the seal of his office. 

DACASIN V. DACASIN

FACTS:

Petitioner Herald Dacasin, American, and respondent Sharon Del Mundo Dacasin, Filipino were
married in Manila in April 1994. They have one daughter, Stephanie, who was born on
September 21, 1995.

On June 1999, Sharon sought and obtained a divorce decree from the Circuit Court, 19th Judicial
Circuit, Lake County, Illinois. The Illinois court dissolved the marriage of the two and awarded
the respondent sole custody of Stephanie. It also retained jurisdiction over the case for
enforcement purposes.

On January 28, 2002, both the petitioner and respondent executed a contract for joint custody
over Stephanie in Manila. Later, on 2004, Herald filed a case against Sharon alleging that Sharon
had exercised sole custody over Stephanie contrary to their agreement. Sharon sought the
dismissal of the complaint for, among others, lack of jurisdiction because of the Illinois court’s
retention of jurisdiction to enforce the divorce decree.
 
On March 1, 2005, the trial court sustained the respondent's motion and dismissed the case for
lack of jurisdiction. The trial court held that: (1) it is precluded from taking cognizance over the
suit considering the Illinois court’s retention of jurisdiction to enforce its divorce decree,
including its order awarding sole custody of Stephanie to respondent;  (2) the divorce decree is
binding on petitioner following the “nationality rule” prevailing in this jurisdiction; and (3) the
Agreement is void for contravening Article 2035, paragraph 5 of the Civil Code prohibiting
compromise agreements on  jurisdiction.
 
Petitioner sought reconsideration, raising the new argument that the divorce decree obtained by
respondent is void. Thus, the divorce decree is no bar to the trial court’s exercise of jurisdiction
over the case.

In its Order dated 23 June 2005, the trial court denied reconsideration, holding that unlike in the
case of respondent, the divorce decree is binding on petitioner under the laws of his nationality.
Hence, this petition.
 
ISSUE: Whether or not the trial court has jurisdiction to take cognizance of petitioner's suit and
enforce the Agreement on the joint custody of the parties' child.
 
RULING:
 
The trial court has jurisdiction to entertain the suit but not to enforce the Agreement which is
void. Subject matter jurisdiction is conferred by law. At the time petitioner filed his suit in the
trial court, statutory law vests on Regional Trial Courts exclusive original jurisdiction over civil
actions incapable of pecuniary estimation. An action for specific performance, such as
petitioner's suit to enforce the Agreement on joint child custody, belongs to this species of
actions. Thus, jurisdiction-wise, the petitioner went to the right court. Indeed, the trial court’s
thinking that the Illinois courts divorce decree stripped it of jurisdiction is unfounded. 
 
The trial court cannot enforce the Agreement which is contrary to law. In this jurisdiction, parties
to a contract are free to stipulate the terms of agreement subject to the minimum ban on
stipulations contrary to law, morals, good customs, public order, or public policy. Otherwise, the
contract is denied legal existence, deemed inexistent and void from the beginning.  

At the time the parties executed the Agreement on 28 January 2002, two facts are undisputed:
(1) Stephanie was under seven years old (having been born on 21 September 1995); and (2)
petitioner and respondent were no longer married under the laws of the United States because
of the divorce decree. The relevant Philippine law on child custody for spouses separated in fact
or in law is also undisputed: "no child under seven years of age shall be separated from the
mother. Clearly then, the Agreement's object to establish a post-divorce joint custody regime
between respondent and petitioner over their child under seven years old contravenes Philippine
law.

The Agreement is not only void ab initio for being contrary to law, it has also been repudiated by
the mother when she refused to allow joint custody by the father. The Agreement would be valid
if the spouses have not divorced or separated because the law provides for joint parental
authority when spouses live together. However, upon separation of the spouses, the mother
takes sole custody under the law if the child is below seven years old and any agreement to the
contrary is void.  Thus, the law suspends the joint custody regime for (1) children under seven
of (2) separated or divorced spouses.  Simply put, for a child within this age bracket (and for
commonsensical reasons), the law decides for the separated or divorced parents how best to
take care of the child and that is to give custody to the separated mother.  Although the
husband's complaint before the RTC appears to be one for specific performance, it is, at heart,
an action for custody and enforcement of parental rights. Being so, the RTC has exclusive
original jurisdiction over the action.

MARY GRACE NATIVIDAD S. POE-LLAMANZARES vs. COMELEC

FACTS:

Mary Grace Natividad S. Poe-Llamanzares was found abandoned as a newborn infant in the
Parish Church of Jaro, Iloilo by a certain Edgardo Militar (Edgardo) on 3 September 1968.
Parental care and custody over petitioner was passed on by Edgardo to his relatives, Emiliano
Militar (Emiliano) and his wife. Three days after, 6 September 1968, Emiliano reported and
registered petitioner as a foundling with the Office of the Civil Registrar of Iloilo City (OCR-
Iloilo). In her Foundling Certificate and Certificate of Live Birth, the petitioner was given the
name "Mary Grace Natividad Contreras Militar." 

When petitioner was five (5) years old, celebrity spouses Ronald Allan Kelley Poe (a.k.a.
Fenando Poe, Jr.) and Jesusa Sonora Poe (a.k.a. Susan Roces) filed a petition for her adoption
with the Municipal Trial Court (MTC) of San Juan City. On 13 May 1974, the trial court granted
their petition and ordered that petitioner's name be changed from "Mary Grace Natividad
Contreras Militar" to "Mary Grace Natividad Sonora Poe."

Having reached the age of eighteen (18) years in 1986, petitioner registered as a voter with the
local COMELEC Office in San Juan City and received her COMELEC Voter's Identification Card.

Initially, the petitioner enrolled and pursued a degree in Development Studies at the University
of the Philippines but she opted to continue her studies abroad and left for the United States of
America (U.S.) in 1988. Petitioner graduated in 1991 from Boston College in Chestnuts Hill,
Massachusetts where she earned her Bachelor of Arts degree in Political Studies.

On 27 July 1991, petitioner married Teodoro Misael Daniel V. Llamanzares (Llamanzares), a

citizen of both the Philippines and the U.S., at Sanctuario de San Jose Parish in San Juan City.

On 18 October 2001, petitioner became a naturalized American citizen. She obtained U.S.
Passport No. 017037793 on 19 December 2001. 

On 8 April 2004, the petitioner came back to the Philippines together with Hanna to support her
father's candidacy for President in the May 2004 elections. It was during this time that she gave
birth to her youngest daughter Anika. She returned to the U.S. with her two daughters on 8 July
2004.

On 7 July 2006, petitioner took her Oath of Allegiance to the Republic of the Philippines pursuant
to Republic Act (R.A.) No. 9225 or the Citizenship Retention and Re-acquisition Act of 2003.
Under the same Act, she filed with the Bureau of Immigration (BI) a sworn petition to reacquire
Philippine citizenship together with petitions for derivative citizenship on behalf of her three
minor children on 10 July 2006.

On 6 October 2010, President Benigno S. Aquino III appointed petitioner as Chairperson of the
Movie and Television Review and Classification Board (MTRCB). Before assuming her post,
petitioner executed an "Affidavit of Renunciation of Allegiance to the United States of America
and Renunciation of American Citizenship" before a notary public in Pasig City on 20 October
2010, in satisfaction of the legal requisites stated in Section 5 of R.A. No. 9225. The following
day, 21 October 2010 petitioner submitted the said affidavit to the BI and took her oath of office
as Chairperson of the MTRCB. From then on, petitioner stopped using her American passport.

On 12 July 2011, the petitioner executed before the Vice Consul of the U.S. Embassy in Manila
an "Oath/Affirmation of Renunciation of Nationality of the United States." On that day, she
accomplished a sworn questionnaire before the U.S. Vice Consul wherein she stated that she had
taken her oath as MTRCB Chairperson on 21 October 2010 with the intent, among others, of
relinquishing her American citizenship.

On 9 December 2011, the U.S. Vice Consul issued to petitioner a "Certificate of Loss of
Nationality of the United States" effective 21 October 2010.

On 2 October 2012, the petitioner filed with the COMELEC her Certificate of Candidacy (COC) for
Senator for the 2013 Elections wherein she answered "6 years and 6 months" to the question
"Period of residence in the Philippines before May 13, 2013." Petitioner obtained the highest
number of votes and was proclaimed Senator on 16 May 2013. 

On 15 October 2015, petitioner filed her COC for the Presidency for the May 2016 Elections. In
her COC, the petitioner declared that she is a natural-born citizen and that her residence in the
Philippines up to the day before 9 May 2016 would be ten (10) years and eleven (11) months
counted from 24 May 2005. The petitioner attached to her COC an "Affidavit Affirming
Renunciation of U.S.A. Citizenship" subscribed and sworn to before a notary public in Quezon
City on 14 October 2015. 

A day after petitioner filed her COC for President, Estrella Elamparo (Elamparo) filed a petition to
deny due course or cancel said COC. 3 separate petitions filed by Francisco S. Tatad (Tatad),
Antonio P. Contreras (Contreras) and Amado D. Valdez (Valdez) against petitioner before the
COMELEC to disqualify petitioner under Rule 25 of the COMELEC Rules of Procedure, alleging
that petitioner lacks the requisite residency and citizenship to qualify her for the Presidency.

ISSUE: whether or not petitioner is qualified  to be a candidate for President in the National and
Local Elections of 9 May 2016? Yes.

RULING:

The fact is that petitioner's blood relationship with a Filipino citizen is DEMONSTRABLE.

At the outset, it must be noted that presumptions regarding paternity is neither unknown nor
unaccepted in Philippine Law. The Family Code of the Philippines has a whole chapter on
Paternity and Filiation. That said, there is more than sufficient evidence that petitioner has
Filipino parents and is therefore a natural-born Filipino. Parenthetically, the burden of proof was
on private respondents to show that petitioner is not a Filipino citizen. The private respondents
should have shown that both of petitioner's parents were aliens. Her admission that she is a
foundling did not shift the burden to her because such status did not exclude the possibility that
her parents were Filipinos, especially as in this case where there is a high probability, if not
certainty, that her parents are Filipinos.

The factual issue is not who the parents of petitioner are, as their identities are unknown, but
whether such parents are Filipinos. Under Section 4, Rule 128:

Sect. 4. Relevancy, collateral matters - Evidence must have such a relation to the
fact in issue as to induce belief in its existence or no-existence. Evidence on
collateral matters shall not be allowed, except when it tends in any reasonable
degree to establish the probability of improbability of the fact in issue.

Foundlings are likewise citizens under international law. Under the 1987 Constitution, an
international law can become part of the sphere of domestic law either by transformation or
incorporation. The transformation method requires that an international law be
transformed into a domestic law through a constitutional mechanism such as local
legislation. On the other hand, generally accepted principles of international law, by virtue of
the incorporation clause of the Constitution, form part of the laws of the land even if
they do not derive from treaty obligations. Generally accepted principles of international law
include international custom as evidence of a general practice accepted as law, and general
principles of law recognized by civilized nations. International customary rules are accepted as
binding as a result from the combination of two elements: the established, widespread, and
consistent practice on the part of States; and a psychological element known as the opinion juris
sive necessitates (opinion as to law or necessity).

It is obvious that because of the sparse evidence on residence in the four cases cited by the
respondents, the Court had no choice but to hold that residence could be counted only from
acquisition of a permanent resident visa or from reacquisition of Philippine citizenship . In
contrast, the evidence of petitioner is overwhelming and taken together leads to no
other conclusion that she decided to permanently abandon her U.S. residence (selling
the house, taking the children from U.S. schools, getting quotes from the freight company,
notifying the U.S. Post Office of the abandonment of their address in the U.S., donating excess
items to the Salvation Army, her husband resigning from U.S. employment right after selling the
U.S. house) and permanently relocate to the Philippines and actually re-established her
residence here on 24 May 2005 (securing T.I.N, enrolling her children in Philippine schools,
buying property here, constructing a residence here, returning to the Philippines after all trips
abroad, her husband getting employed here). Indeed, coupled with her eventual application to
reacquire Philippine citizenship and her family's actual continuous stay in the Philippines over the
years, it is clear that when petitioner returned on 24 May 2005 it was for good.

The Constitution requires presidential candidates to have ten (10) years' residence in the
Philippines before the day of the elections. Since the forthcoming elections will be held on 9 May
2016, petitioner must have been a resident of the Philippines prior to 9 May 2016 for ten (10)
years. In answer to the requested information of "Period of Residence in the Philippines up to the
day before May 09, 2016," she put in "10 years 11 months" which according to her pleadings
in these cases corresponds to a beginning date of 25 May 2005 when she returned for
good from the U.S.

There are three requisites to acquire a new domicile:

1. Residence or bodily presence in a new locality;
2. an intention to remain there; and
3. an intention to abandon the old domicile.

MODULE 4

QUITA V. CA, ET AL.,

FACTS:

Fe Quita and Arturo T. Padlan, both Filipinos, were married in the Philippines on May 18, 1941
and were not blessed with children. Their relationship soured and eventually Fe sued Arturo for
divorce in San Francisco, California, U.S.A. She submitted in the divorce proceedings a private
writing dated July 19, 1950 evidencing their agreement to live separately from each other and a
settlement of their conjugal properties. On July 23, 1954, she obtained a final judgment of
divorce. Three weeks later, she married a certain Felix Tupaz in the same locality but their
relationship also ended in a divorce. Still in the U.S.A., she married for the third time, to a
certain Wernimont.

On 16 April 1972 Arturo died and left no will. In August 1972 Lino Javier Inciong filed a
petition with the Regional Trial Court of Quezon City for issuance of letters of administration
concerning the estate of Arturo in favor of the Philippine Trust Company. Respondent Blandina
Dandan, claiming to be the surviving spouse of Arturo Padlan, and Claro, Alexis, Ricardo,
Emmanuel, Zenaida and Yolanda, all surnamed Padlan, named in the children of Arturo Padlan,
opposed the petition and prayed for the appointment instead of Atty. Leonardo Casaba, which
was resolved in favor of the latter. Upon motion of the oppositors themselves, Atty. Cabasal was
later replaced by Higino Castillon. On 30 April 1973 the oppositors submitted certified
photocopies of the 19 July 1950 private writing and the final judgment of divorce between
petitioner and Arturo. Later Ruperto T. Padlan, claiming to be the sole surviving brother of the
deceased Arturo, intervened.

Petitioner(Fe Quita) moved for the immediate declaration of heirs of the decedent and the
distribution of his estate. At a scheduled hearing, the trial court required the submission of the
records of birth of the Padlan children within ten days from receipt thereof, after which, with or
without the documents, the issue on the declaration of heirs would be considered submitted for
resolution. The prescribed period lapsed without the required documents being submitted.

ISSUE: Who between petitioner and private respondent may validly claim as the spouse of the
decedent.

RULING:

The right of the petitioner to inherit as Arturo’s spouse must still be determined by the trial
court. The trial court failed to conduct a hearing to establish her citizenship when she obtained
the divorce abroad. The purpose of a hearing is to ascertain the truth of the matters in issue
with the aid of documentary and testimonial evidence as well as the arguments of the parties
either supporting or opposing the evidence.

On the other hand, private respondent’s claim to heirship was already resolved by the trial court.
She and Arturo were married on 22 April 1947 while the prior marriage of petitioner and Arturo
was subsisting thereby resulting in a bigamous marriage considered void from the beginning
under Arts. 80 and 83 of the Civil Code. Consequently, she is not a surviving spouse that can
inherit from him as this status presupposes a legitimate relationship.

REPUBLIC V. ORBECIDO

FACTS:

Cipriano Orbecido III married Lady Myros M. Villanueva on May 24th of 1981.Their marriage was
blessed with a son and a daughter, Kristoffer Simbortriz V. Orbecido and Lady Kimberly V.
Orbecido. 

In 1986, Cipriano's wife left for the United States bringing along their son Kristoffer. A few years
later, Cipriano discovered that his wife had been naturalized as an American citizen.

Sometime in 2000, Cipriano learned from his son that his wife had obtained a divorce decree
and then married a certain Innocent Stanley.

Cipriano thereafter filed with the trial court a petition for authority to remarry invoking
Paragraph 2 of Article 26 of the Family Code. No opposition was filed. Finding merit in the
petition, the court granted the same. The Republic, herein petitioner, through the Office of the
Solicitor General (OSG), sought reconsideration but it was denied. 

ISSUE: WHETHER OR NOT RESPONDENT CAN REMARRY UNDER ARTICLE 26 OF THE FAMILY
CODE.

RULING:

No. the respondent at the case at bar cannot remarry due to incompetent evidence concerning
the divorce degree and the naturalization of respondent’s wife.

Paragraph b of Art 26 states that “Where a marriage between a Filipino citizen and a
foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry
under Philippine law. “

On its face, the foregoing provision does not appear to govern the situation
presented by the case at hand. It seems to apply only to cases where at the time of
the celebration of the marriage, THE PARTIES ARE A FILIPINO CITIZEN AND A
FOREIGNER.

The instant case is one where at the time the marriage was solemnized, the
parties were two Filipino citizens, but later on, the wife was naturalized as an
American citizen and subsequently obtained a divorce granting her capacity to
remarry, and indeed she remarried an American citizen while residing in the U.S.A.

Thus, taking into consideration the legislative intent and applying the rule of reason, we
hold that Paragraph 2 of Article 26 should be interpreted to include cases involving
parties who, at the time of the celebration of the marriage were Filipino citizens, but
later on, one of them becomes naturalized as a foreign citizen and obtains a divorce
decree. The Filipino spouse should likewise be allowed to remarry as if the other party were a
foreigner at the time of the solemnization of the marriage. To rule otherwise would be to
sanction absurdity and injustice.

In view of the foregoing, we state the twin elements for the application of Paragraph 2 of
Article 26 as follows: 

1. There is a valid marriage that has been celebrated between a Filipino citizen and a
foreigner; and 
2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to
remarry.

The reckoning point is not the citizenship of the parties at the time of the
celebration of the marriage, but their citizenship at the time a valid divorce is obtained
abroad by the alien spouse capacitating the latter to remarry. In this case, when
Cipriano's wife was naturalized as an American citizen, there was still a valid marriage that has
been celebrated between her and Cipriano. As fate would have it, the naturalized alien wife
subsequently obtained a valid divorce capacitating her to remarry. Clearly, the twin requisites for
the application of Paragraph 2 of Article 26 are both present in this case. Thus Cipriano, the
"divorced" Filipino spouse, should be allowed to remarry.

Nevertheless, The Court’s unanimous decision in holding Article 26, paragraph 2 of the
Family Code be interpreted as allowing a Filipino citizen who has been divorced by a spouse who
had acquired a citizenship and remarried, also to remarry under Philippine law.

CORPUZ V. STO. TOMAS

 
FACTS:

Petitioner Gerbert R. Corpuz was a former Filipino citizen who acquired Canadian
citizenship through naturalization on November 29, 2000. On January 18, 2005, Gerbert married
respondent Daisylyn T. Sto. Tomas, a Filipina, in Pasig City. He returned to the Philippines
sometime in April 2005 to surprise Daisylyn, but was shocked to discover that his wife was
having an affair with another man. Hurt and disappointed, Gerbert returned to Canada and filed
a petition for divorce. The Superior Court of Justice, Windsor, Ontario, Canada granted Gerbert’s
petition for divorce on December 8, 2005. The divorce decree took effect a month later, on
January 8, 2006.

Two years after the divorce, Gerbert has moved on and has found another Filipina to love.
Desirous of marrying his new Filipina fiancée in the Philippines, Gerbert went to the Pasig City
Civil Registry Office and registered the Canadian divorce decree on his and Daisylyn’s marriage
certificate. Despite the registration of the divorce decree, an official of the National Statistics
Office (NSO) informed Gerbert that the marriage between him and Daisylyn still subsists under
Philippine law; to be enforceable, the foreign divorce decree must first be judicially recognized
by a competent Philippine court, pursuant to NSO Circular No. 4, series of 1982.

Accordingly, Gerbert filed a petition for judicial recognition of foreign divorce and/or
declaration of marriage as dissolved (petition) with the RTC. The RTC denied Gerbert’s petition.
The RTC concluded that Gerbert was not the proper party to institute the action for judicial
recognition of the foreign divorce decree as he is a naturalized Canadian citizen. It ruled that
only the Filipino spouse can avail of the remedy, under the second paragraph of Article 26 of the
Family Code, in order for him or her to be able to remarry under Philippine law.

Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force
in the country where they were solemnized, and valid there as such, shall also be valid in this
country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce
is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry,
the Filipino spouse shall likewise have capacity to remarry under Philippine law.

ISSUE: whether or not the second paragraph of Article 26 of the Family Code extends to aliens
the right to petition a court of this jurisdiction for the recognition of a foreign divorce decree?
 
RULING:

The alien spouse can claim no right under the second paragraph of Article 26 of the Family
Code as the substantive right it establishes is in favor of the Filipino spouse.

Given the rationale and intent behind the enactment, and the purpose of the second
paragraph of Article 26 of the Family Code, the RTC was correct in limiting the applicability of
the provision for the benefit of the Filipino spouse. In other words, only the Filipino spouse can
invoke the second paragraph of Article 26 of the Family Code; the alien spouse can claim no
right under this provision.

The foreign divorce decree is presumptive evidence of a right that clothes the party with
legal interest to petition for its recognition in this jurisdiction.

The records show that Gerbert attached to his petition a copy of the divorce decree, as
well as the required certificates proving its authenticity, but failed to include a copy of the
Canadian law on divorce. Under this situation, we can, at this point, simply dismiss the petition
for insufficiency of supporting evidence, unless we deem it more appropriate to remand the case
to the RTC to determine whether the divorce decree is consistent with the Canadian divorce law.

We deem it more appropriate to take this latter course of action, given the Article 26
interests that will be served and the Filipina wife’s (Daisylyn’s) obvious conformity with the
petition. A remand, at the same time, will allow other interested parties to oppose the foreign
judgment and overcome a petitioner’s presumptive evidence of a right by proving want of
jurisdiction, want of notice to a party, collusion, fraud, or clear mistake of law or fact. Needless
to state, every precaution must be taken to ensure conformity with our laws before a recognition
is made, as the foreign judgment, once recognized, shall have the effect of res judicata, between
the parties, as provided in Section 48, Rule 39 of the Rules of Court.

REPUBLIC V. MANALO

FACTS:

Marelyn Tanedo Manalo was married to a Japanese national. She later filed for divorce against
her husband, and a divorce decree was issued by a Japanese court. 

In 2012, she sought the cancellation of the entry of marriage in the Civil Registry of San Juan,
Metro Manila by virtue of the said divorce decree. On January 10, 2012, respondent Marelyn
Tanedo Manalo (Manalo) filed a petition for cancellation of Entry of marriage in the Civil Registry
of San Juan , Metro Manila, by virtue of a judgment of divorce Japanese court.

Finding the petition to be sufficient in form and in substance, Branch 43 of the Regional Trial
Court (RTC) of Dagupan City set the case for initial hearing on April 25, 2012. She later
amended her petition for the judicial recognition of the divorce decree.

The Office of the Solicitor General (OSG) entered its appearance for petitioner Republic of the
Philippines authorizing the Office of the City Prosecutor of Dagupan to appear on its behalf.
Likewise, a Manifestation and Motion was filed questioning the title and/or caption of the petition
considering that based on the allegations therein, the proper action should be a petition for
recognition and enforcement of a foreign judgment.

As a result, Manalo moved to admit an Amended Petition, which the court granted.
 
RTC denied Marelyn's petition, arguing that the divorce obtained by Marelyn in Japan should not
be recognized. The RTC held that based on Article 15 of the New Civil Code, the Philippine law
"does not afford Filipinos the right to file for a divorce whether they are in the country or living
abroad, if they are married to Filipinos or to foreigners, or if they celebrated their marriage in
the Philippines or in another country" and that unless Filipinos ``are naturalized as citizens of
another country, Philippine laws shall have control over issues related to Filipinos' family rights
and duties, together with the determination of their condition and legal capacity to enter into
contracts and civil relations, including marriages."

Upon appeal, the CA overturned RTC's ruling. CA held that Article 26 of the Family Code of the
Philippines (Family Code) is applicable even if it was Manalo who filed for divorce against her
Japanese husband because the decree may obtained makes the latter no longer married to the
former, capacitating him to remarry. As such,  it would be height of injustice to consider
Manelyn as still married to the Japanese national, who, in turn, is no longer married to her and
can legally have another wife.

OSG's motion for recommendation was denied by CA. Hence, the instant petition.
 
ISSUES:
 
1. Does a Filipino citizen have the capacity to remarry under Philippine law after initiating a
divorce proceeding abroad and obtaining a favorable judgment against his or her alien spouse
who is capacitated to remarry? -- YES.
2. Was the divorce obtained by Marelyn Manalo from Japan valid here in the Philippines?--
insufficient evidence.
 
RULING:

1.  Paragraph 2 of Article 26 of the Family Code speaks of  "a divorce x x x validly obtained
abroad by the alien spouse capacitating him or her to remarry." Based on a clear and plain
reading of the provision, it only requires that there be a divorce validly obtained abroad. The
letter of the law does not demand that the alien spouse should be the one who initiated the
proceeding wherein the divorce decree was granted. It does not distinguish whether the Filipino
spouse is the petitioner or the respondent in the foreign divorce proceeding.

Paragraph 2 of Article 26 confers jurisdiction on Philippine courts to extend the effect of a foreign
divorce decree to a Filipino spouse without undergoing trial to determine the validity of the
dissolution of the marriage. It authorizes our courts to adopt the effects of a foreign divorce
decree precisely because the Philippines does not allow divorce. Philippine courts cannot try the
case on the merits because it is tantamount to trying a divorce case. Under the principles of
comity, our jurisdiction recognizes a valid divorce obtained by the spouse of foreign nationality,
but the legal effects thereof, e.g., on custody, care and support of the children or property
relations of the spouses, must still be determined by our courts.

The purpose of Paragraph 2 of Article 26 is to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who, after a foreign divorce decree that is effective
in the country where it was rendered, is no longer married to the Filipino spouse.

A Filipino who initiated a foreign divorce proceeding is in the same place and in like
circumstances as a Filipino who is at the receiving end of an alien initiated proceeding. 
Therefore, the subject provision should not make a distinction. In both instances, it is extended
as a means to recognize the residual effect of the foreign divorce decree on Filipinos whose
marital ties to their alien spouses are severed by operations of their alien spouses are severed
by operation on the latter's national law.

In fact, there is no real and substantial difference between a Filipino who initiated a foreign
divorce proceedings and a Filipino who obtained a divorce decree upon the instance of his or her
alien spouse. In the eyes of the Philippine and foreign laws, both are considered as Filipinos who
have the same rights and obligations in an alien land. The circumstances surrounding them are
alike.
 
Finally, a prohibitive view of Paragraph 2 of Article 26 would do more harm than good. If We
disallow a Filipino citizen who initiated and obtained a foreign divorce from the coverage of
Paragraph 2 Article 26 and still require him or her to first avail of the existing "mechanisms"
under the Family Code, any subsequent relationship that he or she would enter in the meantime
shall be considered as illicit in the eyes of the Philippine law.

Worse, any child born out of such "extra-marital" affairs has to suffer the stigma of being
branded as illegitimate. Surely, these are just a few of the adverse consequences, not only to
the parent but also to the child, if We are to hold a restrictive interpretation of the subject
provision. The irony is that the principle of inviolability of marriage under Section 2, Article XV of
the Constitution is meant to be tilted in favor of marriage and against unions not formalized by
marriage, but without denying State protection and assistance to live-in arrangements or to
families formed according to indigenous customs.

The fact that a validity obtained foreign divorce initiated by the Filipino spouse can be recognized
and given legal effects in the Philippines.

A Filipino who is married to another Filipino is not similarly situated with a Filipino who is married
to a foreign citizen. There are real, material and substantial differences between them. Ergo,
they should not be treated alike, both as to rights conferred and liabilities imposed. Without a
doubt, there are political, economic, cultural, and religious dissimilarities as well as varying legal
systems and procedures, all too unfamiliar, that a Filipino national who is married to an alien
spouse has to contend with. More importantly, while a divorce decree obtained abroad by a
Filipino against another Filipino is null and void, a divorce decree obtained by an alien against his
her Filipino spouse is recognized if made in accordance with the national law of the foreigner.

To make a distinction between them based merely on the superficial difference of whether they
initiated the divorce proceedings or not is utterly unfair. Indeed, the treatment gives undue
favor to one and unjustly discriminate against the other.

Although the SC held that a Filipino may initiate divorce against a foreign spouse, Marelyn's case
was still remanded to the RTC to allow Marelyn to present evidence as proof of the relevant
Japanese law on divorce.
 
2.  The Court cannot determine due to insufficient evidence. It has been ruled that foreign laws
must be proven. There are two basic types of divorces: (1) absolute divorce or a vinculo
matrimonii, which terminates the marriage, and (2) limited divorce or a mensa et thoro, which
suspends it and leaves the bond in full force.  

Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be proven
as a public or official record of a foreign country by either (1) an official publication or (2) a copy
thereof attested by the officer having legal custody of the document. If the record is not kept in
the Philippines, such copy must be (a) accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in
which the record is kept and (b)authenticated by the seal of his office.
  
In granting Manalo's petition, the CA noted:
 
In this case, Petitioner was able to submit before the court a quo the:
 
1) Decision of the Japanese Court allowing the divorce;
2) the Authentication/Certificate issued by the Philippines Consulate General in Osaka,
Japan of the Decree of Divorce; and
3) Acceptance of Certificate of Divorce by the Petitioner and the Japanese national.
Under Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48 (b) of the Rules
of Court, these documents sufficiently prove the subject Divorce Decree as a fact.

Thus, We are constrained to recognize the Japanese Court's judgment decreeing the
divorce. Nonetheless, the Japanese law on divorce must still be proved.
 
Since the divorce was raised by Manalo, the burden of proving the pertinent Japanese law
validating it, as well as her former husband's capacity to remarry, fall squarely upon her.
Japanese laws on persons and family relations are not among those matters that Filipino judges
are supposed to know by reason of their judicial function.
 
In this case, the Court remanded the case to the court of origin for further proceedings and
reception of evidence as to the relevant Japanese law on divorce.

MODULE 5

THE GOVERNMENT OF THE PHILIPPINE ISLANDS V. FRANK

FACTS:

In 1903, in the city of Chicago, Illinois, Frank entered into a contract for a period of 2 years with
the Plaintiff, by which Frank was to receive a salary as a stenographer in the service of the said
Plaintiff, and in addition thereto was to be paid in advance the expenses incurred in traveling
from the said city of Chicago to Manila, and one-half salary during said period of travel.
 
Said contract contained a provision that in case of a violation of its terms on the part of Frank,
he should become liable to the Plaintiff for the amount expended by the Government by way of
expenses incurred in traveling from Chicago to Manila and the one-half salary paid during such
period.
 
Frank entered upon the performance of his contract and was paid half-salary from the date until
the date of his arrival in the Philippine Islands.
Thereafter, Frank left the service of the Plaintiff and refused to make a further compliance with
the terms of the contract.
 
The Plaintiff commenced an action in the CFI-Manila to recover from Frank the sum of money,
which amount the Plaintiff claimed had been paid to Frank as expenses incurred in traveling from
Chicago to Manila, and as half-salary for the period consumed in travel.
 
It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224
should constitute a part of said contract.
 
The Defendant filed a general denial and a special defense, alleging in his special defense that
(1) the Government of the Philippine Islands had amended Laws No. 80 and No. 224 and had
thereby materially altered the said contract, and also that (2) he was a minor at the time the
contract was entered into and was therefore not responsible under the law.
 
The lower court rendered a judgment against Frank and in favor of the Plaintiff for the sum of
265.90 dollars.
 
ISSUE:
1. Did the amendment of the laws altered the tenor of the contract entered into between Plaintiff
and Defendant?
2. Can the defendant allege minority/infancy?
 
RULING:
 
1. NO; It may be said that the mere fact that the legislative department of the Government of
the Philippine Islands had amended said Acts No. 80 and No. 224 by Acts No. 643 and No. 1040
did not have the effect of changing the terms of the contract made between the Plaintiff and the
Defendant. The legislative department of the Government is expressly prohibited by section 5 of
the Act of Congress of 1902 from altering or changing the terms of a contract. The right which
the Defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any
respect by the fact that said laws had been amended. These acts, constituting the terms of the
contract, still constituted a part of said contract and were enforceable in favor of the Defendant.
 
3. NO; The Defendant alleged in his special defense that he was a minor and therefore the
contract could not be enforced against him. The record discloses that, at the time the contract
was entered into in the State of Illinois, he was an adult under the laws of that State and had
full authority to contract. Frank claims that, by reason of the fact that, under that laws of the
Philippine Islands at the time the contract was made, made persons in said Islands did not reach
their majority until they had attained the age of 23 years, he was not liable under said contract,
contending that the laws of the Philippine Islands governed.

It is not disputed — upon the contrary the fact is admitted — that at the time and place of the
making of the contract in question the Defendant had full capacity to make the same. No rule is
better settled in law than that matters bearing upon the execution, interpretation and validity of
a contract are determined by the law of the place where the contract is made. Matters connected
with its performance are regulated by the law prevailing at the place of performance. Matters
respecting a remedy, such as the bringing of suit, admissibility of evidence, and statutes of
limitations, depend upon the law of the place where the suit is brought.
 
 
PHIL. GUARANTEE V. VP EUSEBIO

FACTS:

On 8 November 1980, the State Organization of Buildings (SOB), Ministry of Housing and
Construction, Baghdad, Iraq, awarded the construction of the Institute of Physical Therapy–
Medical Rehabilitation Center, Phase II, in Baghdad, Iraq, (hereinafter the Project) to Ajyal
Trading and Contracting Company (hereinafter Ajyal), a firm duly licensed with the Kuwait
Chamber of Commerce for a total contract price of ID5,416,089/046 (or about US$18,739,668).

On 7 March 1981, respondent spouses Eduardo and Iluminada Santos, in behalf of respondent
3-Plex International, Inc. (hereinafter 3-Plex), a local contractor engaged in construction
business, entered into a joint venture agreement with Ajyal wherein the former undertook the
execution of the entire Project.

Later, or on 8 April 1981, respondent 3-Plex, not being accredited by or registered with the
Philippine Overseas Construction Board (POCB), assigned and transferred all its rights and
interests under the joint venture agreement to V.P. Eusebio Construction, Inc. (VPECI) , a
construction and engineering firm duly registered with the POCB. However, on 2 May 1981, 3-
Plex and VPECI entered into an agreement that the execution of the Project would be under their
joint management.

The SOB required the contractors to submit (1) a performance bond of ID271,808/610
representing 5% of the total contract price and (2) an advance payment bond of ID541,608/901
representing 10% of the advance payment to be released upon signing of the contract. 

To comply with these requirements, respondents 3-Plex and VPECI applied for the issuance of a
guarantee with petitioner Philguarantee, a government financial institution empowered to issue
guarantees for qualified Filipino contractors to secure the performance of approved service
contracts abroad. Petitioner Philguarantee approved respondents' application. 

The construction, which was supposed to start on 2 June 1981, commenced only on the last
week of August 1981. Because of this delay and the slow progress of the construction work due
to some setbacks and difficulties, the Project was not completed on 15 November 1982 as
scheduled. But in October 1982, upon foreseeing the impossibility of meeting the deadline and
upon the request of Al Ahli Bank, the joint venture contractor worked for the renewal or
extension of the Performance Bond and Advance Payment Guarantee.

As of March 1986, the status of the Project was 51% accomplished, meaning the structures were
already finished. The remaining 47% consisted in electro-mechanical works and the 2%, sanitary
works, which both required importation of equipment and materials.

On 26 October 1986, Al Ahli Bank of Kuwait sent a telex call to the petitioner demanding full
payment of its performance bond counter-guarantee.
Upon receiving a copy of that telex message on 27 October 1986, respondent VPECI requested
Iraq Trade and Economic Development Minister Mohammad Fadhi Hussein to recall the telex call
on the performance guarantee for being a drastic action in contravention of its mutual
agreement with the latter that (1) the imposition of penalty would be held in abeyance until the
completion of the project; and (2) the time extension would be open, depending on the
developments on the negotiations for a foreign loan to finance the completion of the project. It
also wrote SOB protesting the call for lack of factual or legal basis, since the failure to complete
the Project was due to (1) the Iraqi government's lack of foreign exchange with which to pay its
(VPECI's) accomplishments and (2) SOB's noncompliance for the past several years with the
provision in the contract that 75% of the billings would be paid in US dollars. Subsequently, or
on 19 November 1986, respondent VPECI advised the petitioner not to pay yet Al Ahli Bank
because efforts were being exerted for the amicable settlement of the Project.

On 14 April 1987, the petitioner received another telex message from Al Ahli Bank stating that it
had already paid to Rafidain Bank the sum of US $876,564 under its letter of guarantee, and
demanding reimbursement by the petitioner of what it paid to the latter bank plus interest
thereon and related expenses.

On 19 June 1991, the petitioner sent to the respondents separate letters demanding full
payment of the amount of P47,872,373.98 plus accruing interest, penalty charges, and 10%
attorney's fees pursuant to their joint and solidary obligations under the deed of undertaking and
surety bond. When the respondents failed to pay, the petitioner filed on 9 July 1991 a civil case
for collection of a sum of money against the respondents before the RTC of Makati City.

The RTC ruled against Philguarantee and held that the latter had no valid cause of action against
the respondents. The CA affirmed the trial court's decision

ISSUE: what law should be applied in determining whether the respondent contractor has
defaulted in the performance of its obligations under the service contract?

RULING:

In this case, the laws of Iraq bear substantial connection to the transaction, since one of the
parties is the Iraqi Government and the place of performance is in Iraq. Hence, the issue of
whether respondent VPECI defaulted in its obligations may be determined by the laws of Iraq.
However, since that foreign law was not properly pleaded or proved, the presumption of identity
or similarity, otherwise known as the processual presumption, comes into play. Where foreign
law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the
same as ours.

It must be noted that the service contract between SOB and VPECI contains no express choice of
the law that would govern it. In the United States and Europe, the two rules that now seem to
have emerged as "kings of the hill" are (1) the parties may choose the governing law; and (2) in
the absence of such a choice, the applicable law is that of the State that "has the most
significant relationship to the transaction and the parties." Another authority proposed that all
matters relating to the time, place, and manner of performance and valid excuses for non-
performance are determined by the law of the place of performance or lex loci solutionis, which
is useful because it is undoubtedly always connected to the contract in a significant way.

Our law, specifically Article 1169, last paragraph, of the Civil Code, provides: "In reciprocal
obligations, neither party incurs in delay if the other party does not comply or is not ready to
comply in a proper manner with what is incumbent upon him."

In order that the debtor may be in default it is necessary that the following requisites be
present: (1) that the obligation be demandable and already liquidated; (2) that the debtor
delays performance; and (3) that the creditor requires the performance because it must appear
that the tolerance or benevolence of the creditor must have ended.

The question of whether there is a breach of an agreement, which includes default or mora,
pertains to the essential or intrinsic validity of a contract.

No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule
followed by most legal systems, however, is that the intrinsic validity of a contract
must be governed by the lex contractus or "proper law of the contract." This is the law
voluntarily agreed upon by the parties (the lex loci voluntatis) or the law intended by them
either expressly or implicitly (the lex loci intentionis). The law selected may be implied from such
factors as substantial connection with the transaction, or the nationality or domicile of the
parties. Philippine courts would do well to adopt the first and most basic rule in most legal
systems, namely, to allow the parties to select the law applicable to their contract, subject to the
limitation that it is not against the law, morals, or public policy of the forum and that the chosen
law must bear a substantive relationship to the transaction.
As found by both the Court of Appeals and the trial court, the delay or the non-completion of the
Project was caused by factors not imputable to the respondent contractor. It was rather due
mainly to the persistent violations by SOB of the terms and conditions of the contract,
particularly its failure to pay 75% of the accomplished work in US Dollars. Indeed, where one of
the parties to a contract does not perform in a proper manner the prestation which he is bound
to perform under the contract, he is not entitled to demand the performance of the other party.
A party does not incur in delay if the other party fails to perform the obligation incumbent upon
him.

As stated earlier, SOB cannot yet demand complete performance from VPECI because it
has not yet itself performed its obligation in a proper manner, particularly the
payment of the 75% of the cost of the Project in US Dollars. The VPECI cannot yet be
said to have incurred in delay. Even assuming that there was delay and that the delay
was attributable to VPECI, still the effects of that delay ceased upon the renunciation
by the creditor, SOB, which could be implied when the latter granted several extensions of
time to the former. Besides, no demand has yet been made by SOB against the respondent
contractor.
 

HASEGAWA V. KITAMURA

FACTS:

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese
consultancy firm providing technical and management support in the infrastructure projects of
foreign governments, entered into an Independent Contractor Agreement (ICA) with respondent
Minoru Kitamura, a Japanese national permanently residing in the Philippines. The agreement
provides that respondent was to extend professional services to Nippon for a year starting on
April 1, 1999. Nippon then assigned respondent to work as the project manager of the Southern
Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy
contract with the Philippine Government.

When the STAR Project was near completion, the Department of Public Works and Highways
(DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the
detailed engineering and construction supervision of the Bongabon-Baler Road Improvement
(BBRI) Project. Respondent was named as the project manageri in the contract's Appendix 3.1.

Petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed
respondent that the company had no more intention of automatically renewing his ICA. His
services would be engaged by the company only up to the substantial completion of the STAR
Project on March 31, 2000, just in time for the ICA's expiry.

Threatened with impending unemployment, respondent, through his lawyer, requested a

negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted
that respondent’s contract was for a fixed term that had already expired, and refused to
negotiate for the renewal of the ICA.

As he was not able to generate a positive response from the petitioners, respondent
consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and
damages with the Regional Trial Court of Lipa City.

ISSUE: Whether or not the RTC of Lipa City has jurisdiction for contracts executed by and
between two foreign nationals in foreign country wholly written in a foreign language?

RULING:

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction
to hear and resolve the civil case for specific performance and damages filed by the respondent.
The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese
nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts
have no substantial relationship to the parties following the [state of the] most significant
relationship rule in Private International Law.

The Court notes that petitioners adopted an additional but different theory when they elevated
the case to the appellate court. In the Motion to Dismiss filed with the trial court, petitioners
never contended that the RTC is an inconvenient forum. They merely argued that the applicable
law which will determine the validity or invalidity of respondent's claim is that of Japan, following
the principles of lex loci celebrationis and lex contractus. While not abandoning this stance in
their petition before the appellate court, petitioners on certiorari significantly invoked the
defense of forum non conveniens. On petition for review before this Court, petitioners dropped
their other arguments, maintained the forum non conveniens defense, and introduced their new
argument that the applicable principle is the [state of the] most significant relationship rule.

Jurisdiction and choice of law are two distinct concepts. 

 Jurisdiction considers whether it is fair to cause a defendant to travel to this state;

 Choice of law asks the further question whether the application of a substantive law which
will determine the merits of the case is fair to both parties.

In this case, only the first phase is at issue—jurisdiction.

Jurisdiction, however, has various aspects. For a court to validly exercise its power to adjudicate
a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or
the respondent, over the subject matter, over the issues of the case and, in cases involving
property, over the res or the thing which is the subject of the litigation. In assailing the trial
court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign
authority which establishes and organizes the court. It is given only by law and in the manner
prescribed by law. It is further determined by the allegations of the complaint irrespective of
whether the plaintiff is entitled to all or some of the claims asserted therein. To succeed in its
motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim,
the movant must show that the court or tribunal cannot act on the matter submitted to it
because no law grants it the power to adjudicate the claims.

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not
properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case
No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation
and is properly cognizable by the RTC of Lipa City.

What they rather raise as grounds to question subject matter jurisdiction are the
principles of lex loci celebrationis and lex contractus, and the "state of the most
significant relationship rule."

Under the "state of the most significant relationship rule," to ascertain what state law to apply to
a dispute, the court should determine which state has the most substantial connection to the
occurrence and the parties. 

In a case involving a contract, the court should consider where the contract was made,
was negotiated, was to be performed, and the domicile, place of business, or place of
incorporation of the parties. This rule takes into account several contacts and evaluates them
according to their relative importance with respect to the particular issue to be resolved.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they
have not yet pointed out any conflict between the laws of Japan and ours. Before determining
which law should apply, first there should exist a conflict of laws situation requiring the
application of the conflict of laws rules. Also, when the law of a foreign country is invoked to
provide the proper rules for the solution of a case, the existence of such law must be pleaded
and proved.

When a conflicts case, one involving a foreign element, is brought before a court or
administrative agency, there are three alternatives open to the latter in disposing of it: (1)
dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the
case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3)
assume jurisdiction over the case and take into account or apply the law of some other State or
States.

 The court’s power to hear cases and controversies is derived from the Constitution and the
laws. While it may choose to recognize laws of foreign nations, the court is not limited by foreign
sovereign law short of treaties or other formal agreements, even in matters regarding rights
provided by foreign sovereigns.

Neither can the other ground raised, forum non conveniens, be used to deprive the trial court of
its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1,
Rule 16 of the Rules of Court does not include it as a ground. Second, whether a suit should be
entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the
particular case and is addressed to the sound discretion of the trial court. In this case, the RTC
decided to assume jurisdiction. Third, the propriety of dismissing a case based on this principle
requires a factual determination; hence, this conflict principle is more properly considered a
matter of defense.

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case
filed by respondent and the grounds raised by petitioners to assail that jurisdiction are
inappropriate, the trial and appellate courts correctly denied the petitioners’ motion to dismiss.

 
PRINCESS TALENT CENTER PRODUCTION, INC. V. MASAGCA
 
FACTS:

Sometime in November 2002, respondent auditioned for a singing contest at ABC-Channel 5 in

Novaliches, Quezon City when a talent manager approached her to discuss her show business
potential. Enticed by thoughts of a future in the entertainment industry, the respondent went to
the office of petitioner PTCPI, a domestic corporation engaged in the business of training and
development of actors, singers, dancers, and musicians in the movie and entertainment
industry. At the office, respondent met petitioner Moldes, President of petitioner PTCPI, who
persuaded respondent to apply for a job as a singer/entertainer in South Korea.

A Model Employment Contract for Filipino Overseas Performing Artists (OPAS) To Korea
(Employment Contract) was executed on February 3, 2003 between respondent and petitioner
PTCPI as the Philippine agent of SAENCO, the Korean principal/promoter. 

Respondent left for South Korea on September 6, 2003 and worked there as a singer for nine
months, until her repatriation to the Philippines sometime in June 2004. Believing that the
termination of her contract was unlawful and premature, the respondent filed a complaint
against petitioners and SAENCO with the NLRC.

For nine months, respondent worked at Seaman's Seven Pub in Ulsan, South Korea - not at
Siheung Tourist Hotel Night Club in Siheung, South Korea as stated in her Employment Contract
- without receiving any salary from SAENCO. Respondent subsisted on the 20% commission that
she received for every lady's drink the customers purchased for her. Worse, respondent had to
remit half of her commission to petitioner Moldes for the payment of the fictitious loan. When
respondent failed to remit any amount to petitioner Moldes in May 2004, petitioner Moldes
demanded that respondent pay the balance of the loan supposedly amounting to US$10,600.00.
To dispute the loan, respondent engaged the legal services of Fortun, Narvasa & Salazar, a
Philippine law firm, which managed to obtain copies of respondent's Employment Contract and
Overseas Filipino Worker Information Sheet. It was only then when respondent discovered that
her employment was just for six months and that her monthly compensation was US$600.00,
not just US$400.00.

Respondent further narrated that on June 13, 2004, petitioner Moldes went to South Korea and
paid the salaries of all the performers, except respondent. Petitioner Moldes personally handed
respondent a copy of the loan document for US$10,600.00 and demanded that respondent
terminate the services of her legal counsel in the Philippines. When respondent refused to do as
petitioner Moldes directed, petitioner Moldes withheld respondent's salary. On June 24, 2004,
Park Sun Na (Park), President of SAENCO, went to the club where respondent worked, dragged
respondent outside, and brought respondent to his office in Seoul where he tried to intimidate
respondent into apologizing to petitioner Moldes and dismissing her counsel in the Philippines.
However, respondent did not relent. Subsequently, Park turned respondent over to the South
Korean immigration authorities for deportation on the ground of overstaying in South Korea with
an expired visa. It was only at that moment when respondent found out that petitioner Moldes
did not renew her visa.

Labor Arbiter dismissed for lack of merit respondent's complaint, as well as all other claims of
the parties.

ISSUE: Whether or not the Respondent was illegally dismissed

 
RULING:

The Court finds that respondent was illegally dismissed.

 
Dismissal from employment has two facets: 
 
 first, the legality of the act of dismissal, which constitutes substantive due process;
 second, the legality of the manner of dismissal, which constitutes procedural due
process. 
The burden of proof rests upon the employer to show that the disciplinary action was
made for lawful cause or that the termination of employment was valid.
Unsubstantiated suspicions, accusations, and conclusions of the employer do not
provide legal justification for dismissing the employee. When in doubt, the case should
be resolved in favor of labor pursuant to the social justice policy of our labor laws and
the 1987 Constitution.

Employees are not stripped of their security of tenure when they move to work in a different
jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle of lex
loci contractus. 

First, established is the rule that lex loci contractus (the law of the place where the
contract is made) governs in this jurisdiction. There is no question that the contract of
employment in this case was perfected here in the Philippines. Therefore, the Labor
Code, its implementing rules and regulations, and other laws affecting labor apply in
this case.

Furthermore, settled is the rule that the courts of the forum will not enforce any foreign claim
obnoxious to the forum's public policy. Here in the Philippines, employment agreements are
more than contractual in nature. The Constitution itself, in Article XIII, Section 3, guarantees the
special protection of workers.

• Lex loci contractus governs. Masagca’s model employment contract was executed in the
Philippines on Feb. 3, 2003. Philippine Constitution and labor laws governed Masagca's
employment with Princes Talent/SAENCO. 

• There was an Illegal Dismissal in the instant case as per Philippine law: Non compliance of
substantive due process (legality of the act of dismissal):

 Dismissal was NOT FOR A JUST OR AUTHORIZED CAUSE. 

1. Princess Talent/SAENCO cannot feign ignorance of expired work visa as they were the ones
who facilitated and processed the requirements themselves. 
2. Violation of club policies was not sufficiently proven as the Joint Affidavit is self-serving. No
evidence was even presented that Masagca was apprised of such club policies, either in a written
form or verbally. Masagca however presented evidence by way of a poster and pictures of her
co-workers wearing the same skimpy dresses and an Affidavit of a disinterested witness (Pelzer)
which had no apparent gain in executing such. 
3. If Masagca was truly misbehaving, she would have been terminated at the earliest
opportunity to protect the cub’s interest. However, she was made to work beyond the 6- month
period.

Non compliance of procedural due process (legality of manner of dismissal): TWIN NOTICE and
HEARING was not complied 

1. No attempt at all by Princess Talent/SAENCO to submit evidence of compliance with

twinnotice requirement and ample opportunity to be heard as per Art. 277(b) of the Labor Code.
Neither petitioners nor SAENCO described the circumstances how respondent was informed of
the causes for her dismissal. However, Masagca was able to recount in detail what had happened
to her. Neither was she served

 2 written notices, nor was she afforded a hearing to defend herself.